A strong real estate strategy needs a steady banking partner

Whether you’re an investor, owner, operator or banker, the commercial real estate (CRE) market demands a durable strategy for weathering periods of turbulence. Recent years make the point. Interest rates jumped starting in 2022 and have stayed higher than expected. Inflation took off around the same time and, though it has moderated, changed the calculus around operating expenses and construction costs. 

Unlike many other investments, real estate assets are long-lived, and finding a steady, strategic approach for managing them requires a banking partner that can help find the right financing, even for shifting circumstances. Borrowers benefit from banks that have a full menu of lending options, deep expertise in those products, and decades of experience navigating market cycles. 

“As bankers, we must be well versed in a broad spectrum of financing options,” says Mary Lucy Lester, senior vice president and Southeast market manager with Capital One’s CRE lending team. “No two situations are the same, and we need to understand the specific needs of each borrower and match them with the right solutions.” 

In her three decades of CRE lending, Lester made it her goal to equip clients with all key information as she develops and negotiates their financing packages. "It’s important to fully understand the deal structure and have familiarity with all documentation," she says.

Knowledge and leadership become especially important during periods of market uncertainty, when interest rates climb, valuations shift, or liquidity disappears. Lester has seen the CRE market through many ups and downs, including boom times, recessions and the mortgage crisis of 2007 to 2009. 

She volunteered for a role in the special assets group during one particularly volatile period. In that position, she guided clients through restructuring conversations and complicated workouts, and for some borrowers helped to entirely recalibrate the capital stack. At other points in her career, she has been an underwriter, an asset manager, a credit officer and a relationship manager. 

Helping clients execute a strategy that can weather whatever the market brings demands depth of knowledge about everything from bridge loans that private credit might provide for a property in transition to agency financing for more mature investments.

Monica Schroeder, vice president of origination in Capital One’s multifamily finance group, has specialized expertise in the financing needs of manufactured housing communities, a critical housing segment that may be underserved by traditional lending frameworks. Her knowledge in this area covers subjects ranging from the long-term stability of land-lease models to the nuances of park-owned home ratios, a metric to assess operational risk based on the portion of the homes on a property that are owned by the borrower. 

Sara Graham, a senior vice president at Capital One, oversees origination for multifamily housing nationwide. She handles market rate financing, housing preservation, and workforce and affordable housing, having built a base of knowledge that spans the complexities of multifamily transactions. 

Financing in this category can include a large number of stakeholders. Projects for which Capital One is an equity investor using federal low-income housing tax credits, for example, may involve a housing authority and local legislative bodies that issue bonds. The bank’s community finance group may provide construction funding, while another group may do permanent financing when the project is converted after it’s built.  

“Understanding and helping to manage all the challenges of a complex deal with multiple parties is very satisfying,” Graham says. “We’re supporting borrowers who are meeting housing needs and building or preserving affordable homes.”

Lester, Schroeder and Graham have almost 70 years of combined CRE banking experience. They take pride in bringing a deep understanding of real estate finance and knowledge of the CRE markets’ many challenges to the table as they work with Capital One clients. 

The paths that brought them to their current positions have had twists and turns, to be sure. Schroeder’s CRE career began almost without her knowing it, she says, when she took a job as an administrative assistant in a mortgage banking office. The person who hired her recognized her potential and opened doors that have helped her build her skills and knowledge. 

As members of Capital One’s extensive CRE banking team, these three bankers strive to share what they know and mentor the next generation of banking and real estate professionals. All of them work with the CREW Network, an organization that helps women build and accelerate CRE careers. Lester works with the Urban Land Institute to foster best practices and solve real estate challenges. 

The rewards, these bankers say, are found in seeing projects and financings come together and knowing they fill a role for the communities involved. “We help people have a place to live and call home,” Schroeder says.

 

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